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Mid Cap Value Funds

I am looking at a few Mid Cap Value funds because I believe we are due for a style rotation to Value and Mid Cap soon. I am interested in the following Nuance Mid Cap Value NMAVX, Artisan Mid Cap Value ARTQX , JP Morgan Mid Cap Value JAMCX, Janus Henderson Mid Cap Value JNVSX. I do like the look of the Nuance Fund, but it has a turnover of over 100% And how can you be a value investor with a high turnover such as that. Any one that has any feedback will be much appreciated. Thank you in advance.

Comments

  • Might FLPSX interest you? and FAMEX?
  • If you want mid-cap value look at DON. I like the wisdom tree methodology, and it's been beaten down good this year (still down 19%). So, you get mean reversion too.
  • edited September 7

    I am looking at a few Mid Cap Value funds because I believe we are due for a style rotation to Value and Mid Cap soon. I am interested in the following Nuance Mid Cap Value NMAVX, Artisan Mid Cap Value ARTQX , JP Morgan Mid Cap Value JAMCX, Janus Henderson Mid Cap Value JNVSX. I do like the look of the Nuance Fund, but it has a turnover of over 100% And how can you be a value investor with a high turnover such as that. Any one that has any feedback will be much appreciated. Thank you in advance.

    I'ld be leery of any value fun with a turnover higher than 50%. Shoot. I'm leery of any fund over that.

    If they're turning it over at 124% I'ld have to have faith that their stock-picking is so freaking smart that they'll beat the index more often than not. I would study their strategy thoroughly.

    So far, they do look pretty smart. M* call them a blend. So they may be sneaking some growth stocks in there.

  • Hi Abe,
    I like your memorial at DC. Was there when I was in the 6th grade. Saw that Washington memorial, the reflecting pool, White House, the Smithsonian, etc. God, it was great! I thought this country was the best ever!
    So, Linc, why do you think things are going to change now? Just asking.....
    Value in these funds for a reason, no? Problems, yes, and we're talking mid not large, right? Think Japan 2.0. We're in a slow motion train wreck. It's going to take months to see it. Little is not good right now.....much less value. Again, what will change to drive this? A vaccine? Doubt it.....
    It's about bills and money. I'm a huge mid cap fan. Value needs growth (GDP) and inflation to rise in value. Is that present?
    I own large value. Just bought it and have lost money: AMFFX. Why would mid do better now? Again, not picking on you....just saying......
    Interest rates and inflation will tell you when. Right now, they're going nowhere, so unless you have a long timeframe, I would look elsewhere.
    God bless
    the Pudd
  • If you're looking at value funds, I would stick to etfs so that you can ,if necessary, sell quickly without incurring any transaction fees. For mcv, DON and VOE look like good choices.
  • edited September 8
    I have no idea if there will be a rotation to value or mid-caps in the near-future. Regarding turnover, I generally avoid equity funds with turnover greater than 40%.

    The ARTQX management team outperformed the mid-cap value category for a number of years based on total return/risk-adjusted return. However, poor stock selection and the retirement of one of the senior managers seems to have taken a toll. ARTQX has lagged its category every calendar year from 2014 - 2019 (except 2016).

    TRMCX is a good fund. Although there is some key-person risk, T. Rowe Price is well-resourced and generally handles manager transitions well. Purchase of this fund may be restricted to customers who trade directly with T. Rowe Price.

    If you're not opposed to indexing, VMVAX may also be worthy of consideration.
  • Janus Henderson Mid Cap Value JNVSX

    Did you mean Janus (JNMCX) or Jensen (JNVSX), or both?

    Toward the end of their fund management tenure with JNMCX, the Perkins seemed to have lost their mojo. In the past few (about 5) years the change in management has brought some improvement. Still, nothing to get excited about. FWIW the cheaper Janus D shares recently reopened.

    @Observant1 identified another fund recently reopened, TRMCX. That's a better fund. TRP has one of the best records in handling changes in management, transitioning slowly and not surprising investors.

    I agree with the others about NMVAX's high turnover rate. The prospectus even declares: "The Fund’s annual portfolio turnover rate will generally be 100% or greater." So the high turnover last year isn't an exception. While M* says that the fund's portfolio has been blend for the past three years, it still classifies the fund as value. OTOH, Lipper classifies it as midcap core (blend). The high turnover might suggest that the fund will follow market trends, drifting more quickly to value if there is rotation. Or the fund might simply be a value poseur.

    Another factor you might want to consider if you're thinking about market rotation is the possibility that foreign equities could start outperforming domestic ones. Small and midcap funds tend not to invest as much abroad. Exceptions include TRMCX (15%, of which 1/5 is EM), and NMVAX (20% but no EM). FLPSX (41%, but only about 1/15 EM) is in a class by itself here, holding more foreign stocks than some global funds including Fidelity's own Worldwide FWWFX (37%, 1/8 EM) (mentioned for reference purposes only).

  • @wxman123, thanks for finding DON, I'm putting it on my buy list in case this dip turns into a correction.
  • A day like today makes me wonder why buy now? Tomorrow could be better.

    Hard to suggest other value funds without knowing what's available to Abe. Some 401's have a limited menu.

    I look at FLPSX and wonder how it's going to perform after Tillinghast leaves. I see they have a team in place. So maybe they all get a sleeve. But that's one gigantic mid-cap with more holdings than some indexes.
  • He's 62 --- do you know something unannounced?
  • Tillinghast took some time off several years ago and the Liw Priced fund was ran by a large team. It was a great fund when the asset was under $500M back in the early 90's. I believe there are better candidates out there with small asset and equally skillful manager.
  • msf
    edited September 8
    I've had a hard time finding a similar fund. The closest I could come was PGVFX. The two funds tracked well 2015-2020, but diverged substantially in March.

    Tillinghast had one of the shortest hiatuses on record (4 months).
    https://www.reuters.com/article/us-fidelity-tillinghast/star-fidelity-manager-tillinghast-to-take-leave-idUSTRE76C6C520110713

    Prospectus, September 29, 2011:
    "Effective September 6, 2011 the following have been named interim portfolio managers of the fund while the fund's portfolio manager, Joel Tillinghast is on a leave of absence from the firm. Mr. Tillinghast is expected to return in the first quarter of 2012."

    Same prospectus, As Revised January 9, 2012
    No mention of leave of absence, just this sentence: "Joel Tillinghast is lead portfolio manager of the fund, which he has managed since December 1989." That was followed by a list of co-managers who had managed the fund "since September 2011."

    For several years, FLPSX was a small cap fund, e.g. from 1997: "Exceptional stock selection has been a hallmark of Fidelity Low-Priced Stock, the biggest fund not only among this select threesome [FLPSX, Royce Low Priced, and Robertson Stephens Global Low Priced] but also among all funds that buy small stocks."

    https://www.nytimes.com/1997/11/30/business/mutual-funds-is-there-a-pound-of-wisdom-in-a-pennywise-strategy.html

    It did have an auspicious start, albeit as a low-load (3%) fund. (See 1994 prospectus). "The fund, which celebrates its first birthday this week [Dec 23, 1990], was down 3.1 percent at the end of November. That compared to an 8.9 percent drop for the 77 small-company stock funds tracked by Morningstar Inc."
    https://www.sun-sentinel.com/news/fl-xpm-1990-12-23-9003040100-story.html

    The 1997 NYTimes article cited above adds that "several weeks ago it raised the price it is willing to pay to $35 for a share from $25. When the fund began in 1989, its price limit was $15 a share."
  • >> For several years, FLPSX was a small cap fund ... 1997

    With a few exceptions, iirc, owning the occasional low-priced LC stock --- e.g., I believe I recall its owning B, Barnes Group, and Nav, Navistar, and then later Vz and T when the criterion moved above $25. (Not positive; those were just stocks I followed / owned individually at the same time as FLPSX.)
    I suppose the first two might not have qualified at LC, but no one thought of them as SC.
    Tillinghast's abiding interest in overseas companies has been a drag for some time now.
  • As noted in the article, the threshold moved above $25 toward the end of 1997. So perhaps that was when it became more of a mid cap fund. Excerpts from the July 31, 1997 annual report:
    Q. HOW DID THE FUND PERFORM, JOEL?
    A. The fund did well. For the 12 months that ended July 31, 1997, the fund returned 39.45%. This topped the small-cap funds average, as tracked by Lipper Analytical Services, which returned 31.96% over the same period, as well as the Russell 2000 Index, which had a 12-month return of 33.39% as of July 31, 1997.
    Q. WHAT FACTORS INFLUENCED PERFORMANCE?
    A. Stock prices rose faster than earnings for both large and small companies, but particularly for a concentrated group of gigantic companies such as General Electric and Coca-Cola. The fund holds mostly small companies, and it was frustrating that many small-cap stocks - which grew as fast and steadily as the household names - didn't enjoy similar stock performance. The good news is that small, steady growth stocks are typically cheaper than their larger counterparts and this should eventually result in better relative performance.
    You can go searching for those large company stocks in the annual report. Navistar was held by Fidelity Balanced (FBALX) which is also in the combined annual report. Otherwise, I don't see the others, but I didn't look too carefully.
  • edited September 8
    If you play with this chart:.......FLPSX,IJH,NAESX.....

    FLPSX performed well PRIOR to 2005 but after that, for the last 15 years, it has been an index hugger.
  • I may be misremembering and perhaps will poke around from earlier. I was impressed that any fund owned B, an old (old-style manufacturing) company.
  • Rbrt said:

    If you play with this chart:.......FLPSX,IJH,NAESX.....

    https://stockcharts.com/freecharts/perf.php?FLPSX,IJH,NAESX

    FLPSX performed well PRIOR to 2005 but after that, for the last 15 years, it has been an index hugger.

    You may want to correct the embedded link to stockcharts, as I've done above.

    That aside, the annual differences in performance between FLPSX and NAESX over the past 10 years, per M* are:
    2010: -7.02% (FLPSX underperformed)
    2011: 2.75%
    2012: 0.45%
    2013: -3.30%
    2014: 0.29%
    2015: 3.22%
    2016: -9.39%
    2017: 4.57%
    2018: -1.32%
    2019: -1.55%
    2020 YTD: -2.61%

    Portfolio Visualizer shows correlation dipping after 2014. Click on the Rolling Correlation tab for the graph showing this divergence.
    https://www.portfoliovisualizer.com/asset-correlations?s=y&symbols=FLPSX,NAESX,IJH&startDate=01/01/2005&timePeriod=2&tradingDays=60&months=36

    FWIW, M* classified FLPSX as midcap blend 2010-2013, and midcap value 2014 to the present.

  • yes, its diversification has been a drag, and I think it may have lost assets now and again
  • Thanks to all of you for the feedback . I think I will either invest in the Jensen or T. Rowe Price funds. I already have FAMEX to cover the growthier side of midcap.
  • edited September 9
    Take a look at the obscurely named: Invesco Russell 1000® Dynamic Multifactor ETF

    M*
    http://portfolios.morningstar.com/fund/summary?t=OMFL

    ETF.com
    https://www.etf.com/OMFL

    PortfolioVisualizer
    https://tinyurl.com/omfl-at-pv
  • Could be an interesting fund, but seeing that it is "dynamic", it may not be what the OP is looking for. M* shows a significant style drift, from large cap growth in 2017 to mid cap blend (2018) to its current mid cap value. That's likely by design, as Invesco says it reweights its holdings based on where we are in the economic cycle.
    https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&ticker=OMFL

    FWIW, M* classifies the fund as large cap blend, and Lipper calls it multi-cap core. The turnover over the fiscal year ending June 2019 was 138%; the 83% that M* reports is for the two months July 2019-August 2019, according to the prospectus.
    http://hosted.rightprospectus.com/Invesco/Fund.aspx?cu=46138J619&dt=P&ss=etf

    It appears that the fund has four fixed portfolios, representing recovery, expansion, slowdown, and contraction phases in the economic cycle. So if the country remains in one phase of a cycle for a year, one should expect very little turnover (primarily reflecting changes in the Russell 1000). OTOH, if there's even one change of phase, there should be a significant turnover, as one portfolio is substituted for another. That would explain the high turnover rate.

    In terms of design, I'd prefer to see a smooth transition between phases. Aside from this, it is an interesting approach. The questions are how well matched the factor weightings are to the economic phases (i.e. whether stocks with those particular weightings will tend to do better in each of the phases), and how well the index identifies the current cycle phase we're in. Typically NBER takes several months to determine, retrospectively, that we have entered (or exited) a recession. This index must make similar determinations in real time.
    https://www.nber.org/cycles/recessions_faq.html

    "The current economic cycle/market condition category, which determines which factor configuration is applied, is derived from a rules-based methodology that relies on certain leading economic indicators and information regarding global risk appetite. The applicable category is provided to the Index Provider by Invesco Indexing in the form of a data signal (the “Signal”)." (prospectus)

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